-- Combination will Create the Largest and Strongest
Korean-American Bank in the United States --
-- Investor Conference Call Scheduled for 5:45 p.m. Eastern Time
Today --
LOS ANGELES--(BUSINESS WIRE)--
Nara Bancorp, Inc. (NASDAQ: NARA) and Center Financial Corporation
(NASDAQ: CLFC) announced jointly today that they have entered into a
definitive agreement to merge, forming the largest and strongest
Korean-American bank in the United States. The combined company will be
the only Korean-American bank with a national presence, with more than
40 branches in Southern California, Northern California, New York, New
Jersey, Seattle and Chicago.
Under the terms of the merger agreement, Center Financial shareholders
will receive a fixed ratio of 0.7804 of a share of Nara Bancorp common
stock in exchange for each share of Center Financial common stock they
own in a stock-for-stock transaction valued at approximately $285.7
million. Based on the closing price on December 8, 2010, this represents
$7.16 per Center Financial share. Nara Bancorp shareholders will own 55%
of the combined company and Center Financial shareholders will own 45%.
Based on financial results as of September 30, 2010 and excluding
anticipated merger adjustments to occur at the time of closing, the
combined company will have $5.3 billion in assets, $3.8 billion in gross
loans, $4.0 billion in deposits, and $627 million in equity, making it
the largest Korean-American bank by any measure. The combined company
will have the number one deposit market share position among
Korean-American banks in Southern California and Northern California,
and the second largest deposit market share in the New York/New Jersey
area, and will have a strong presence in Seattle and Chicago.
The combined entity will be led by a complementary partnership of
executive management and Board members. Alvin Kang, President and Chief
Executive Officer of Nara Bancorp, will be Chief Executive Officer of
the combined company, and Jae Whan (J.W.) Yoo, President and Chief
Executive Officer of Center Financial, will be President. Ki Suh Park,
Nara’s current Chairman of the Board of Directors, will serve as
Chairman of the combined bank holding company, and Chang Hwi Kim,
Center’s Compensation Committee Chair, will serve as Vice Chairman of
the Board. For the bank level Board of Directors, Kevin S. Kim, Center’s
Audit Committee Chair, will serve as Chairman, and Scott Yoon-suk Whang,
Nara’s Compensation Committee Chair, will serve as Vice Chairman. The
Board of Directors of the combined company and bank will have equal
representation, consisting of seven directors each from Nara and Center,
and will include a strong mix of Korean-American business community
leaders, banking industry veterans and regulatory experts.
The combined company will operate under a new name that will be
determined prior to the closing. A Consolidation Committee consisting of
two representatives from each Board will oversee the integration
process. Director Chang Hwi Kim of Center Financial will serve as
Chairman of the Consolidation Committee.
“This combination brings together the two leading banks in the
Korean-American community and creates the largest and strongest
Korean-American banking franchise in the United States,” said Al Kang,
President and Chief Executive Officer of Nara Bancorp. “This transaction
is expected to provide significant benefits to all of the key
stakeholders of both companies. The shareholders should benefit from the
increased earnings power of the combined company and our improved
ability to generate profitable growth and higher returns going forward.
The customers should benefit from the convenience of additional branches
and the increased investment we can make in our products and services
capabilities. And the employees of both companies should benefit from
being part of the most profitable and strongest bank in the
Korean-American community.”
“We believe this is the right combination at the right time,
transforming the Korean-American banking landscape,” said Jae Whan
(J.W.) Yoo, President and Chief Executive Officer of Center Financial.
“The merger brings together two companies that share many similarities
in corporate culture, customer base, business lines, product offerings
and conservative credit guidelines. As a combined entity, we will be
able to more effectively compete in the challenging regulatory and
economic environment. We expect to have a smooth and seamless
integration, which will help us to quickly begin realizing the benefits
of this merger for our shareholders, our customers and our employees.”
Expected benefits of the merger include:
-
Accretive to earnings – cost savings are expected to be approximately
$11.2 million, or 10% of the combined operating expense base of Nara
Bancorp and Center Financial, with 50% being phased in by the fourth
quarter of 2011, and 100% being realized thereafter
-
Provides potential revenue enhancement opportunities in areas such as
SBA lending and trade finance
-
Positions the combined company to capture additional market share due
to its status as the preeminent Korean-American bank
-
Provides a strong capital and liquidity position that will accelerate
growth potential in existing and new attractive markets
-
Improves the ability of the combined company to be a consolidator in
the Korean-American banking industry
-
Creates the deepest bench of leadership in the Korean-American banking
industry and improves the combined company’s ability to retain and
attract critical talent
-
Improves the position of the combined company to accelerate the
repayment of TARP funds and resume dividend payments in the future
The merger is also expected to result in $10.7 million in one-time
deal-related expenses.
The boards of directors of both companies have unanimously approved the
transaction. The transaction is subject to regulatory approval, the
approval of the shareholders of both Nara Bancorp and Center Financial,
and other customary closing conditions. The transaction is expected to
close during the second half of 2011.
Nara Bancorp was advised by the investment banking firm of Keefe,
Bruyette, & Woods, Inc., as well as the law firm of Mayer Brown LLP.
Center Financial was advised by the investment banking firm of D.A.
Davidson & Co., as well as the law firm of Morrison & Foerster LLP.
Conference Call and Webcast
A conference call with simultaneous webcast to discuss the merger
announcement will be held today, December 9, 2010 at 2:45 p.m. Pacific /
5:45 p.m. Eastern. Interested participants and investors may access the
conference call by dialing 877-941-2928 (domestic) or 480-629-9724
(international), conference ID# 4393513. An accompanying slide
presentation can be downloaded from the Investor Relations sections of
Nara Bank’s website at www.narabank.com
and Center Financial’s website at www.centerbank.com.
There will also be a live webcast of the call available at the Investor
Relations sections of Nara Bank’s website at www.narabank.com
and Center Financial’s website at www.centerbank.com.
After the live webcast, a replay will remain available in the Investor
Relations sections of both websites.
A replay of the call will be available at 800-406-7325 (domestic) or
303-590-3030 (international) through December 16, 2010, conference ID#
4393513.
About Nara Bancorp
Nara Bancorp, Inc. is the parent company of Nara Bank, which was founded
in 1989. Nara Bank is a full-service community bank headquartered in Los
Angeles, with 23 branches and one loan production office in the United
States. Nara Bank operates full-service branches in California, New York
and New Jersey, and a loan production office in Texas. Nara Bank was
founded specifically to serve the needs of Korean-Americans. Presently,
Nara Bank serves a diverse group of customers mirroring its communities.
Nara Bank specializes in core business banking products for small and
medium-sized companies, with an emphasis in commercial real estate and
business lending, SBA lending and international trade financing. Nara
Bank is a member of the FDIC and is an Equal Opportunity Lender.
About Center Financial Corporation
Center Financial Corporation is the holding company of Center Bank, a
community bank offering a full range of financial services for diverse
ethnic and small business customers. Founded in 1986 and specializing in
commercial and SBA loans and trade finance products, Center Bank has
grown to be one of the nation’s leading financial institutions focusing
on the Korean-American community, with total assets of $2.27 billion at
September 30, 2010. Headquartered in Los Angeles, Center Bank operates a
total of 22 full-service branches and two loan production office. The
company has 16 full-service branches located throughout Southern
California and three branches in Northern California. Center Bank also
operates two branches and one loan production office in the Seattle
area, one branch in Chicago and a loan production office in Denver.
Center Bank is a California state-chartered institution and its deposits
are insured by the FDIC to the extent provided by law.
Additional Information and Where to Find It
In connection with the proposed merger, Nara Bancorp, Inc. will file
with the SEC a Registration Statement on Form S-4 that will include a
Joint Proxy Statement/Prospectus of Center Financial Corporation and
Nara Bancorp, as well as other relevant documents concerning the
proposed transaction. Shareholders are urged to read the Registration
Statement and the Joint Proxy Statement/Prospectus regarding the merger
when it becomes available and any other relevant documents filed with
the Securities and Exchange Commission (“SEC”), as well as any
amendments or supplements to those documents, because they will contain
important information. You will be able to obtain a free copy of the
Joint Proxy Statement/Prospectus, as well as other filings containing
information about Nara Bancorp and Center Financial at the SEC’s
Internet site (www.sec.gov).
You will also be able to obtain these documents, free of charge, from
Nara at www.narabank.com
under the tab “Investor Relations” and then under the heading “SEC
Filings” or from Center Financial at www.centerbank.com
under the tab “Investor Relations” and then under the heading “SEC
Filings.”
Participants in Solicitation
Nara Bancorp, Center Financial and their respective directors, executive
officers, management and employees may be deemed to be participants in
the solicitation of proxies in respect of the merger. Information
concerning Nara Bancorp’s participants is set forth in the proxy
statement, dated May 24, 2010, for Nara Bancorp’s 2010 annual meeting of
stockholders as filed with the SEC on Schedule 14A. Information
concerning Center Financial’s participants is set forth in the proxy
statement, dated April 30, 2010, for Center Financial’s 2010 annual
meeting of stockholders as filed with the SEC on Schedule 14A.
Additional information regarding the interests of participants of Nara
Bancorp and Center Financial in the solicitation of proxies in respect
of the merger will be included in the registration statement and joint
proxy statement/prospectus to be filed with the SEC.
Forward-Looking Statements
This press release contains statements regarding the proposed
transaction between Nara Bancorp and Center Financial, the expected
timetable for completing the transaction, future financial and operating
results, benefits and synergies of the proposed transaction and other
statements about the future expectations, beliefs, goals, plans or
prospects of the management of each of Nara Bancorp and Center
Financial. These statements are based on current expectations,
estimates, forecasts and projections and management assumptions about
the future performance of each of Nara Bancorp and Center Financial and
the combined company, as well as the businesses and markets in which
they do and are expected to operate. These statements constitute
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Words such as “expects,”
“believes,” “estimates,” “anticipates,” “targets,” “goals,” “projects,”
“intends,” “plans, “seeks,” and variations of such words and similar
expressions are intended to identify such forward-looking statements
which are not statements of historical fact. These forward-looking
statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult to assess.
Actual outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The closing of the
proposed transaction is subject to regulatory approval, the approval of
the shareholders of both Nara Bancorp and Center Financial, and other
customary closing conditions, the receipt of which . There is no
assurance that such conditions will be met or that the proposed
transaction will be consummated within expected time frame, or at all.
If the transaction is consummated, factors that may cause actual
outcomes to differ from what is expressed or forecasted in these
forward-looking statements include, among things: difficulties and
delays in integrating Nara Bancorp and Center Financial and achieving
anticipated synergies, cost savings and other benefits from the
transaction; higher than anticipated transaction costs; deposit
attrition, operating costs, customer loss and business disruption
following the merger, including difficulties in maintaining
relationships with employees, may be greater than expected; required
governmental approvals of the merger may not be obtained on its proposed
terms and schedule, or without regulatory constraints that may limit
growth; competitive pressures among depository and other financial
institutions may increase significantly and have an effect on revenues;
the strength of the United States economy in general, and of the local
economies in which the combined company will operate, may be different
than expected, which could result in, among other things, a
deterioration in credit quality or a reduced demand for credit and have
a negative effect on the combined company’s loan portfolio and allowance
for loan losses; changes in the U.S. legal and regulatory framework; and
adverse conditions in the stock market, the public debt market and other
capital markets (including changes in interest rate conditions) which
would negatively affect the combined company’s business and operating
results.
For a more complete list and description of such risks and
uncertainties, refer to Nara Bancorp’s Form 10-K for the year ended
December 31, 2009, as amended, and Center Financial’s Form 10-K for the
year ended December 31, 2009, as amended, as well as other filings made
by Nara Bancorp and Center Financial with the SEC. Except as required
under the U.S. federal securities laws and the rules and regulations of
the SEC, Nara Bancorp and Center Financial disclaim any intention or
obligation to update any forward-looking statements after the
distribution of this press release, whether as a result of new
information, future events, developments, changes in assumptions or
otherwise.
Source: Nara Bancorp, Inc. and Center Financial Corporation
Contact:
For Nara Bancorp:
Tony Rossi
Investor Relations
310-478-2700
x13
trossi@finprofiles.com
or
For
Center Financial Corporation:
Angie Yang
SVP, Investor
Relations
213-251-2219 / 213-422-1390
angiey@centerbank.com